Navigant Research Blog

A few weeks ago, Hitachi in India announced that it is working on a pilot at the All India Institute of Medical Sciences (AIIMS) hospital in New Delhi that focuses on energy efficiency. The project has three major goals: to upgrade the facilities of AIIMS, install a highly efficiency data center, and incorporate the data from the energy management system (EMS) to optimize the facility’s overall performance. This is the latest example of energy management coming to the fore in healthcare facilities. The drivers and barriers for advanced energy management in healthcare are detailed in Navigant Research’s recent report, Energy Management for Healthcare Markets.

The energy management for healthcare market expected is to grow from $949 million in 2015 to over $2 billion in 2024, driven by government regulation on one hand and corporate strategy on the other, both working to keep costs low for hospitals. According to the U.S. Energy Information Administration, energy conservation measures have been employed by hospitals at high rates, yet our research shows that the integration of these system with digital EMSs is less universal.

Surviving Disaster

Improving the energy posture of hospitals can also help them become more resilient. After events like Hurricane Katrina (when the failure of hospital power systems was citywide and catastrophic, as revealed in Sheri Fink’s devastating account, Five Days at Memorial) and Hurricane Sandy, hospitals are incorporating plans to function without utility-based power in the face of a disaster. At the simplest level, a highly energy efficient hospital running with efficient HVAC and lighting systems would need less power than an inefficient one. But the hospital’s ability to leverage onsite backup power can make the difference, literally, between life and death in a disaster.

One Wisconsin healthcare system has taken the concept of resilience to its logical extreme. Gunderson Health System has endeavored to generate its own power from a myriad of sources. This includes burning biomass from waste wood, employing dairy waste digesters, using methane captured from local landfills, and gathering power from wind turbines on farms in the area. Gunderson claims to be the first energy-independent healthcare system in the world. More significantly, the system presents itself as an example of a locally powered healthcare facility, proving that it’s integrated into the local community.

Going Micro

Unlike Gunderson, most hospitals use diesel generators for power backup. These generators are seldom-used but ready to deliver backup power when needed. And if you’ve ever been near the hospital when they’re running, you know how unpleasant they are to be around. While the price of crude oil has dropped in global markets, electricity prices have not universally fallen. The use of fossil fuel-based generators as backups poses an interesting question: If the price of gas stays low, as forecasted, will hospital facilities shift their use of petroleum generators to essentially become microgrids, to save costs?

Although most facilities are not prepared to do so at present, it’s highly likely that all new healthcare facilities will introduce more flexible backup power, to avoid more Katrinas in the future.

The idea of printing buildings has rapidly evolved from a way to demonstrate novel approaches to construction to the arrival of a few real businesses making a go at the construction market. In recent blogs, we’ve reported on some of the different ways 3D printing is increasing in scale. The technology is undergoing an inverse of Moore’s law in computing, where transistor density doubled every 2 years, making computing cheaper and smaller. In 3D printing, the platforms are going mobile and getting flexible, enabling larger and larger structures to be built. At the same time, 3D printing is getting cheaper, too, with entry-level printers available for under $1,000 at stores like Home Depot.

Chinese company WinSun, which last year printed 10 small houses in under 24 hours, recently completed printing (and assembling) a five-story apartment building in Shanghai. Like WinSun’s other printed buildings, this 12,000 SF building is printed from a slurry of concretes and recycled materials, like steel and glass.

Printed buildings could lower the cost of materials (if local or recycled materials can be used), speed up construction, make customized homes easier and cheaper to build, and generate much less waste in the construction process. WinSun claims that its technology can reduce construction (or, rather, assembly) time by half, reduce the volume of materials by 60%, and lower labor costs by up to 80%. (It should be noted that these estimates are for construction in China and are just for the shell of a building, not full delivery, other than internal walls and staircases.)

Assembled Onsite

Other companies are moving forward with advances in printing buildings. Dutch company CyBe Additive Industries has developed a proprietary concrete slurry. Slovenian company BetAbram aims to develop scaffolds for printing, and Oakland, California- based Emerging Objects is working on materials design technology that can make new forms with novel properties. Contour Crafting, founded by a University of Southern California professor, touts 3D printing as a solution for emergency or low-income housing in the developing world.

Perhaps the most promising demonstration is the 3D Print Canal House, a system of printing modules of buildings that can be assembled onsite. This has advantages above the mortar-and-mortar (instead of brick-and-mortar) method of material extrusion, namely the ability perform quality control upon assembly and to meet local building codes that address structural integrity.

Infinitely Malleable

A key advantage of printed structures is the ability to tailor a building space’s functions to its inhabitants. Portending the future of tailored space, Voxel8, using Autodesk’s Spark, has unveiled a small desktop printer that can print electronics directly into 3D printed materials. The user swaps out the plastic ink with metal conducting wire (or light-emitting diodes [LEDs]), which the printer lays down. Then the plastic ink is reinserted, and the printer embeds the wires and electronics within the structure.

Extending this idea into the building space, one can envision a prefabricated wall, pre-wired with alternating current (AC) (or direct current [DC]) cable, networks such as Ethernet cable, and sensors. Using this approach, buildings could be built with plug-and-play walls and rooms, printed onsite to the customers’ specifications.

That will require a series of advances. And the concept of plug-and-play would work only if the electronics in a building were truly interoperable, as described in Navigant Research’s recent Commercial Building Automation Systems report. Project Haystack, an open-source initiative developed to streamline the names and functions in buildings systems, could play an important role in this printed, modular, infinitely customizable future.

The frequently overlooked component for unlocking the great potential of energy efficiency in commercial buildings is the bottom line: cold hard cash. For commercial building owners and operators, especially those managing small and medium (under 50,000 square feet) facilities, the idea of installing energy-efficient equipment or energy management tools is a nice-to-have, not a need-to-have.

Tenant improvement and making a profit by keeping expenses low come before improving or replacing equipment with state-of-the-art efficient alternatives. A recent report from the National Institute of Building Sciences’ Council on Finance, Insurance and Real Estate contains a set of findings and recommendations on how small commercial buildings can implement energy-efficient retrofit projects.

Live Data

The report lays out the case for focusing on small and medium commercial buildings, a dormant $36 billion market opportunity that could provide huge employment opportunities (424,000 job-years) and carbon reductions (87 million metric tons a year). According to Navigant Research’s Energy Management for Small and Medium Buildingsreport, the energy management systems and services associated with this market are expected grow from $231.3 million in revenue in 2013 to $1.3 billion in 2022. The benefits are clear; what can be done?

The report recommends a few multi-tiered sets of actions that could help invigorate this market, at least in the United States. These include federal action, such as expanding research from the Commercial Buildings Energy Consumption Survey (CBECS), which is a critical tool for understanding the state of energy use in commercial buildings, but is only updated every 5 years. CBECS data could be used with benchmarking data to make the collective understanding of building energy data a living data set, providing a meaningful performance-based evaluation of how energy efficiency is actually deployed in existing buildings.

Increasing the Pace

Another recommendation is challenging in this political climate. The Section 179 (D) tax code, a part of the Energy Policy Act (EPAct) that incentivized commercial building energy efficiency, expired at the end of 2013. At $1.80 per square foot for the full achievement of 50% energy reduction, the incentive was helpful. The reliance on modeling was a challenge, and the improvement of benchmarking data drawn from a living version of CBECS could change that.

Finally, the report focuses on the variety of financing that can be made more available to this market. If energy efficiency financing can be presented as a secure investment with known outcomes and well-understood risks, the adjacent available pools of financing could, with some urging, be made available. Increasing the deployment of utility-based on-bill financing is one possibility, but not all utilities in the United States would be open to that approach. Property Assessed Clean Energy (PACE) programs enable energy efficiency (or solar deployments) to be financed by local bonds, and repaid via local property taxes over time. The White House recently announced it would use the success of PACE in the multifamily residential market in California and apply it to federal Housing and Urban Development Department housing.

In December, President Obama gathered healthcare leaders to announce a set of new recommendations for making the country’s healthcare facilities more climate resilient. Hurricane Sandy caused over $3 billion in damage to healthcare facilities alone, triggering federal attention to the issue. At the event, the U.S. Department of Health and Human Services announced a web-based Climate Resilience Toolkit as well as a best-practices guide, “Primary Protection: Enhancing Health Care Resilience for a Changing Climate.”

The guide describes a number of issues that have caused hospitals to lose power during recent disasters. These include reliance on local infrastructure (namely local [municipal] steam generation), aging infrastructure, and a reliance on onsite diesel generators, which are often poorly maintained and rely on limited fuel supplies.

A Holistic View

The report also cites a challenge in the approach to backup power. Backup systems are viewed as having no value during normal operations, and therefore “are less likely to attract adequate investment and maintenance from the private sector.” By viewing backup power as emergency-only, the hospital is viewing power in binary terms; the big diesel generator is there when you need it, and takes up space (and money) when you don’t.

A more holistic view of energy use can lead to a more resilient facility. The report cites a number of strategies, including the use of combined heat and power, energy efficiency, and passive survivability. This last concept drives building design and functionality so that hospitals can still function without power. With operable windows, passive heating and cooling, and naturally ventilated spaces, these levels of resiliency can be accomplished.

Generator Hospital

Navigant Research’s reports on Grid-Tied Energy Storage present a range of technologies that can aid in power management all the time, not just during a crisis. By viewing grid connectivity as a continuum, facilities can mitigate the effects of disasters and make money by selling power into the grid. The resilient healthcare facility of the future may not just be one that can survive a disaster but one that provides power to the community 365 days a year.

In upstate New York, the town of Potsdam just announced a microgrid project that will connect 12 facilities using 3 MW of combined heat and power, 2 MW of solar, 2 MW of storage, and 900 kW of hydro-electric generation. The local hospital is a key stakeholder in this project, led by Clarkson University. Other partners include General Electric (GE) Global Research and GE Energy Consulting, National Grid, and the National Renewable Energy Laboratory.

Innovative technology is not only being deployed for the entire hospital facility. At the Texas Scottish Rite Hospital for Children in Dallas, Texas, flywheel manufacturer Vycon installed two 300 kW flywheel systems just to power the imaging facility. The benefits of flywheels include high reliability, power density, and overall quality, as well as the quiet nature of backup power. While the hospital has only suffered a few power outages in recent decades, the protection of the expensive equipment from power spikes and voltage drops is of great value.